N.E. grid leader cites dependence on natural gas

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The region’s growing dependence on natural gas to generate electricity is a serious threat that could cause more frequent power outages and increase energy prices, Gordon van Welie, head of New England’s power grid operator, said in prepared testimony to Congress on Tuesday.

Van Welie, chief executive of ISO New England, told the House Energy and Commerce Committee that natural gas is used by power plant operators to generate more than half of the region’s electricity, largely replacing a diversified mix of oil, coal, gas, and nuclear power. Nuclear accounts for about one-third of the region’s electricity production.

While natural gas is much cleaner than fuel oil and coal, as well as increasingly plentiful as shale reserves are tapped, New England’s limited natural gas pipeline capacity is constraining supplies. As a result, the region has experienced price spikes, during periods of high demand, driving average wholesale electricity prices up more than 100 percent in January and more than 300 percent in February compared with 2012, van Welie said in prepared remarks.

The lack of fuel diversity is particularly troublesome during extreme weather, which increases power and heating or cooling demands simultaneously.

Van Welie pointed to a cold snap in January, and the near blizzard-like conditions that dumped several feet of snow across New England in February. During those periods, he said, “ISO operators had to cope with multiple instances where generators [both gas- and oil-fired] could not get fuel to run.”

One solution, van Welie has said, is to redesign the wholesale electric market to give power generators more incentive to keep extra fuel supplies on hand rather than buying them on the spot market as needed.

His testimony Tuesday reiterated that point.

“As the region’s dependence on natural gas grows, it will become increasingly important to have a flexible gas supply system that can meet the demand for electricity 7 days per week, 24 hours a day,” van Welie said in his remarks.

Robert Rio, a senior vice president at Associated Industries of Massachusetts, the state’s largest employers group, said he worries that New England’s energy supplies are already stretched too thin with no quick relief in sight.

Part of the answer, Rio said, is to build more natural gas pipeline capacity to bring cheaper fuel supplies here — but he does not see that happening soon. He also advocated for a more diverse mix of energy sources, but said he does not see enough renewable sources like wind turbines or solar panels coming online fast enough to have an impact. Fossil fuels like coal and oil are unlikely to make a comeback.

“Once the coal plants are gone, they’re gone. You’re never going to build another one,” Rio said. “The only other option is to bring in more hydro and more gas. Those are going to be our predominant fuels going forward.”